A Juris Doctor has seemingly become the equivalent to an English degree. In both cases, you analyze the big picture and argue the finer points. Like English majors, you gain prescient insights into the human condition (and yourself). When graduation comes, wannabe barristers and bards both ask themselves the same question: “How am I going to get a job with this degree?”
Fear not, aspiring attorneys. Despite tales of law schools closing, enrollment dropping, and salaries stagnating, there are signs of hope. According to new data by the National Association for Law Placement (NALP), hiring continues to climb, especially for summer associates. While growth has been maddeningly slow and inconsistent in recent years, it appears that the worst is over for law graduates.
“During the last couple of years we have seen some bobbling numbers in the markers that describe law student recruiting volumes,” wrote James Leipold, NALP’s executive director, in a press release. “But this past fall, for the first time since the recession, we see some clear markers of recovery.”
SUMMER ASSOCIATE HIRING AND OFFER RATES RISING
One key marker is summer associate hiring, often the means for law students to gain experience and advocates. According to NALP data, 52% of firms surveyed increased the number of summer associate offers in 2014 over the previous year. Among these firms, 14% reported raising the number of offers by 10 or more.
And law students are capitalizing on these opportunities. Among 2014 summer associates, 93.4% landed a full-time job offer (up nearly two percentage points from 2013). Compare that to 2009, the height of the recession, when just 69% of summer associates received permanent offers. In fact, associates are even doing better than their 2007 peers, who produced a 92.8% offer rate.
James Leipold
“At the end of 2014,” Leipold points out, “for the first time since the recession we saw a clear uptick in the demand for legal services, driven largely by transactional volume, with predictions of continued increased demand in 2016.”
ON CAMPUS INTERVIEWS PRODUCING SUMMER ASSOCIATE JOBS
The interview process has also yielded results for students. Among all employers, the median number of summer associate offers climbed to 9.5, up from 8 over the past two years. On average, firms made 35 offers, up from 27 in 2013 (and closing in on the record 39-offer average set in 2007). NALP adds that 2014 was the fifth consecutive year where student hiring has increased.
Callback interviews were another bright spot in 2014. Here, 52% of these interviews produced summer associate hires, up five points from the previous year. With greater interest in their talents, law students are becoming increasingly choosy about the summer associate positions they take. Thirty-five per cent of students accepted their offers in 2014, down from 43% in 2009 (but still higher than pre-recession acceptance levels, which stood in the high 20s and low 30s).
INCONSISTENCY AND UNCERTAINTY STILL PREVALENT
On the surface, it appears that law school hiring is poised for a renaissance. Look deeper and there are plenty of reasons for skepticism. Overall, the legal market, like the American economy, remains a step-forward-step-back proposition. And the NALP data reflects this reality – with Leipold pointing to geography and practice areas as reasons why some firms are struggling more than others.
The percentages don’t necessarily provide a full picture, either. While 52% of law firms jacked up summer associate hiring in 2014, another 35% made fewer offers, a heavy drag on growth. Average class sizes for associates were another red flag in NALP’s data. While offer rates may have risen, the average class size, which is five associates per firm, hasn’t budged since 2010 (when the average was four). And that number still falls short of the six summer associates that firms averaged from 2005-2009.
Even more, Leipold observes, clients are continuing to push for lower costs. As the volume of legal work rises, some firms lack the revenue cushion to add summer associates and law grads to lighten the load. “The downward pressures on the costs for providing those services continues unabated,” Leipold writes, “and industry-wide realization rates continue to fall to new historic lows. It is likely that further stratification in the market will mean that some firms will continue to regrow their summer programs while others maintain programs that are much smaller than they were prior to 2009.”
COMPETITION FOR TALENT TO INCREASE AS ENROLLMENTS DECLINE
In fact, the numbers actually hide a salient fact: there are fewer law students out there. Recent ABA figures reveal that enrollment dropped 4.4% from 2013 to 2014. In fact, there are 27,000 fewer students between the incoming class of 2013 and the class of 2017.
As a result, Leipold foresees firms scrambling to lock in legal talent. “In general,” he writes, “law firms remain cautious in their first-year hiring, but in some sectors that hiring is once again becoming aggressive, particularly in the race for perceived ‘top talent,’ driven perhaps in part by some anxiety that smaller entering law school classes going forward will mean a slimmer talent pool to be divided amongst competitors.”
And that’s great news for law students hoping for salaries to pay off those six-figure debts. “It is hard to look very far ahead with any confidence,” Leipold writes, “but it seems pretty clear that the summer and fall recruiting season that is shaping up for 2015 will be one of the most competitive we have seen in some time.”
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